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The effect of some potentially interfering substances and conditions on the antimicrobial activity of Melaleuca alternifolia (tea tree) oil was investigated. Agar and broth dilution methods were used to determine minimum inhibitory and cidal concentrations of tea tree oil in the presence and absence of each potentially interfering substance. Activity was determined against Gram-positive and -negative bacteria, and Candida albicans. Minimum inhibitory or cidal concentrations differed from controls by two or more dilutions, for one or more organisms, where Tween-20, Tween-80, skim-milk powder and bovine serum albumin were assessed. These differences were not seen when assays were performed in anaerobic conditions, or in the presence of calcium and magnesium ions. The effect of organic matter on the antimicrobial activity of tea tree oil was also investigated by an organic soil neutralization test. Organisms were exposed to lethal concentrations of tea tree oil ranging from 1–10% (v/v), in the presence of 1–30% (w/v) dry bakers’ yeast. After 10 min contact time, viability was determined. At ≥ 1%, organic matter compromised the activity of each concentration of tea tree oil against Staphylococcus aureus and C. albicans. At 10% or more, organic matter compromised the activity of each tea tree oil concentration against Pseudomonas aeruginosa. Organic matter affected 1 and 2% tea tree oil, but not 4 and 8%, against Escherichia coli. In conclusion, organic matter and surfactants compromise the antimicrobial activity of tea tree oil, although these effects vary between organisms.